Revision Wipes Outs "Surprising" December Philly Fed Surge

Tyler Durden's picture


On December 20, when we posted on the miraculous surge in the Philly Fed, offsetting the far weaker NY Fed data, we were left scratching our heads as the upwardly inflecting data made little sense in the context of broader data. To wit: "Three days ago the New York Fed released the December print Empire State index which showed a broad contraction across all key verticals. Today, in fine "keeping them baffled with bullshit" form, the Philly Fed swing precisely the other way, and despite expectations for a second consecutive negative print of -3 to be precise, up from -10.7 last month, the General Business Activity indicator printed at 8.1, the highest print since April, with New Orders at 10.7, the highest since February, and Employment at 3.6, the highest since April. Naturally, the algos pretending to trade on news, took this news and ran futures higher..."

We also added, rather providently, "Needless to say, all economic data in the US at this point is completely meaningless, with regional distortions, seasonal adjustments, political pressures and overall central planning making a mockery of the US economic data apparatus."

Today, 20 days after the data release, we get the explanation for this very surprising jump, which naturally put the algos in a buying tizzy and sent the market higher by 1% (before it flash crashed late in the night) on the date of its release, as well as the latest validation of our skepticism, courtesy of the Philly Fed annual data revision. To wit: "Overall, the data revisions adjust the current year-end indexes moderately downward. There were more pronounced downward adjustments of the six-month expectations indexes over the last two months of 2012." And of course, it is the last data point - December - that matters most. So how does December looks like pre and post-revision? Well, it is self-explanatory: look at the chart and decide for yourselves - blue is original, red is revised.

This is the kind of "credible" data that drives headline scanning algos.

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Thu, 01/10/2013 - 11:32 | 3140596 ShrNfr
ShrNfr's picture

Who wudda guessed?

Thu, 01/10/2013 - 11:41 | 3140638 Manthong
Manthong's picture

It’s a good thing it turns out there’s a lot more inventory laying around..

might need it in an emergency

Thu, 01/10/2013 - 12:01 | 3140720 dwdollar
dwdollar's picture

If the algos just got it over with and priced in ultimate nirvana, that is Jesus himself coming down to bail us out, they could rally the markets 1000% today and tomorrow we might have a real market that reflects the real economy whether good or bad.

Thu, 01/10/2013 - 12:10 | 3140759 ArkansasAngie
ArkansasAngie's picture

It only means that YoY will look great until the next revision.

Statistical Ponzi.

Thu, 01/10/2013 - 13:31 | 3141109 DeadFred
DeadFred's picture

It's virtually impossible to program a machine to discern truth from lies. As long as the primary driving force in the market relies on input from co-opted news and government agencies the markets will go where they are scripted. Until they break.

Thu, 01/10/2013 - 14:23 | 3141295 Panafrican Funk...
Panafrican Funktron Robot's picture

Fed Data:  just as manipulated as Fed fiat.

Thu, 01/10/2013 - 12:06 | 3140748 ball-and-chain
ball-and-chain's picture

Same old story.

Same old song and dance.

The fraud and deception never stop.

Thu, 01/10/2013 - 12:50 | 3140921 BullsNBeers
BullsNBeers's picture

There has been absolutely ZERO reason to even read these bullshit reports for years now (with the possible exception of a good laugh).

Up is down, black is white, dogs and cats ... living together.

I'd put more faith in a meth addict trying to read tea leaves or chicken gizzards at this point than I would any establishment data.

Thu, 01/10/2013 - 15:59 | 3141747 JPM Hater001
JPM Hater001's picture

You should see what they can do with a squirell

Thu, 01/10/2013 - 11:40 | 3140602 LawsofPhysics
LawsofPhysics's picture

"shocker", Damn my lying eyes.  Going to be an interesting set of bond auctions moving forward.  and BOOM go the equities priced in paper promises.

Thu, 01/10/2013 - 14:25 | 3141304 Panafrican Funk...
Panafrican Funktron Robot's picture

I completely agree with you in "real" terms.  Unfortunately, this shit is priced in "nominal" terms.  

Thu, 01/10/2013 - 11:35 | 3140604 IridiumRebel
IridiumRebel's picture

NO!!!!! Really? They fudge numbers and revise them lower because, I don't know, THEY FUCKIN' LIE!?!??!?!?

Thu, 01/10/2013 - 11:35 | 3140607 vote_libertaria...
vote_libertarian_party's picture


Thu, 01/10/2013 - 11:35 | 3140610 spartan117
spartan117's picture

There goes the dollar.  Turns out Jim Sinclair was the only man correct on the Euro. 

Thu, 01/10/2013 - 11:40 | 3140631 Stuart
Stuart's picture

James Rickards called the Euro right too. 

Thu, 01/10/2013 - 11:37 | 3140614 Cognitive Dissonance
Cognitive Dissonance's picture

I'm sensing a trend here.

<Data manipulation bitches.>

Thu, 01/10/2013 - 14:27 | 3141307 Panafrican Funk...
Panafrican Funktron Robot's picture

The funny part is that the revisions are total bullshit too.  I think a few folks miss that still.  

Initial "good" data:  excuse to pump the market.

Revised "bad" data:  excuse to keep the spigot on.

Thu, 01/10/2013 - 14:31 | 3141326 Cognitive Dissonance
Cognitive Dissonance's picture

I am constantly amused how we all claim the data is false, and then sit mesmerized by the (bad) data, even citing it to support our own pet thesis. I am not immune to this myself.

The key for the manipulators is to keep us distracted and chasing ghosts...any way they can.

Thu, 01/10/2013 - 11:37 | 3140615 IridiumRebel
IridiumRebel's picture

Hey! Inventories was revised up! Nice. #winning

Thu, 01/10/2013 - 11:37 | 3140617 Yamaha
Yamaha's picture

It will all improve with the massive guns sales.

Thu, 01/10/2013 - 11:39 | 3140625 muppet_master
muppet_master's picture


QQQ at $67.75 in case spx 1468 TODAY was the double TOP...last week also spx high = 1468......spx now @ plenty of ammo if they pump it to 1500.  strategy = short slowly, enjoy life = don't watch casino for more than 10 minutes/day.

NO i'm not a stupid "technician"...maybe only 3% technician, 50% fundamental, and the rest gut feeling.


Thu, 01/10/2013 - 12:31 | 3140837 retiringteach
retiringteach's picture

so you're 97% asshole and 100% bull shitter

Thu, 01/10/2013 - 16:01 | 3141754 JPM Hater001
JPM Hater001's picture

Your numbers see manipulated.  Would you like to revise the?

Thu, 01/10/2013 - 11:39 | 3140628 Stuart
Stuart's picture

Lets face it.. Government figures are simply no longer credible.  They're all for political spin.  The USA has become the USSA and everyone is being treated as muppets. 

Thu, 01/10/2013 - 11:40 | 3140632 H E D G E H O G
H E D G E H O G's picture

Shit Tyler, you guys had the chart upside down last time! Maybe not, try turning it sideways, no, turn back to the left 180, whats that look like?

Thu, 01/10/2013 - 13:51 | 3141195 thomcat00
thomcat00's picture

Over, under, sideways, down, backwards, forwards, square and round, the graph still yields the same message: (b.s./QE3)>AMZN's p/e

Thu, 01/10/2013 - 11:41 | 3140637 AccreditedEYE
AccreditedEYE's picture

Well, here is the push we needed to fill the gap lower. Now, every foaming-at-the-mouth PM is getting ready to BUY THE DIP.

Thu, 01/10/2013 - 11:42 | 3140639 Racer
Racer's picture

Hens teeth are more common that gobmuddlement data that is later revised in positive way

Thu, 01/10/2013 - 11:43 | 3140648 Mae Kadoodie
Mae Kadoodie's picture

Philly Cheesesteak sales through the roof.

Thu, 01/10/2013 - 11:59 | 3140709 NoDebt
NoDebt's picture

Yeah, man.  Gonna have a few this weekend between the Flyers game (afternoon) and the Soundgarden concert (evening)!

Hockey Cliff.... off! 

My first year with Flyers season tickets and wouldn't you know.

Thu, 01/10/2013 - 13:53 | 3141199 thomcat00
thomcat00's picture

Enjoy in PHL. It's all going up, with the curve shaped like a hockey stick.

Thu, 01/10/2013 - 11:46 | 3140660 unplugged
unplugged's picture

"This is the kind of "credible" data that drives headline scanning algos."

If the "algos" are worth anything, you should have a net of near 0 in market preformance due to this component over the time period of the initial release and the revision.  Or am I just plain being stoopid?

Thu, 01/10/2013 - 11:47 | 3140662 Super Broccoli
Super Broccoli's picture

Anyway nobody cares about data revisions, the average american trader has a memory of a few days ... 20 days ! jeez that's ancient times bitch !

Look a trader job's to trade things up for the damn bank he works for. No matter how bad the fondamentals are. What do you expect him to do ? Sell and grow vegtables ? Naaaaah the only think the dumbfuck can do is buy worthless pieces of paper he'll never even see using a bloomberg keyboard !

Thu, 01/10/2013 - 11:47 | 3140664 PUD
PUD's picture

When things are bad sometimes you have to lie. For your own good of course!

Thu, 01/10/2013 - 11:47 | 3140665 Squid Vicious
Squid Vicious's picture

At this point I trust the numbers from China more, which is to say slightly above 0.000

Thu, 01/10/2013 - 11:48 | 3140668 muppet_master
muppet_master's picture

the casino mgrs

will REVISE the price of sp500 below 1200 within the next 3-6 months....after dead cat bounce will REVISE it to below 1000...on its way below 400..

all those that "dollar cost avg" all these years buying for their "retirement" will get shafted...i don't dollar cost avg..i scale in positions...long.....or short...and wait for move....i place positions, AFTER massive moves and bet AGAINST the move.

ex. 4-2012 shorted spx @ 1400+ (when cbs-mw kate gibson went "FULL RETARD" according to ZH)

6-4-12 spx @ 1275 covered all shorts, went long....another shoe shine boy marc hulbert from cheer-bs mw said:  watch out for an avalance of sell-orders on monday = me PANIC COVER SHORTS..

yes i have both links stored in a word file...for future use to make fun of those stupid cheerleaders.

QE3, day after i called the TOP @ 1474...although i started shorting @ 1390-1474..avg price = 1450

covered at 1380-1360....went long at 1354 (bottom 1343)

recently shorted @ spx 1420-1468...avg price = 1435..its now @ 1464.......= get the feeling of like when i was short pre QE3 news at 1450+ and approaching 1474 TOP.

Thu, 01/10/2013 - 11:48 | 3140672 venturen
venturen's picture

Central Planning at its finest!

Thu, 01/10/2013 - 11:50 | 3140675 Randall Cabot
Randall Cabot's picture

What are minus unfilled orders?

Thu, 01/10/2013 - 11:53 | 3140684 IridiumRebel
IridiumRebel's picture

That's a great fuckin' question. Let me go get our magic fucking unicorn to see what he says.

Thu, 01/10/2013 - 11:55 | 3140691 ekm
ekm's picture

As I said on the other post, it's all and all and all and all about ORDERLY DELEVERAGING, as Mario Draghi said this morning.

Slip of tongue or on purpose, I don't know.


That's what happened from 2004 till 2007. FED tried to oppose disorderly deleveraging until 2008's baaaaaaam.


It's gonna pop and it's gonna be bad, way worse then 2008.

Thu, 01/10/2013 - 12:01 | 3140707 ekm
ekm's picture

Rule number 1 of collapses:



Thu, 01/10/2013 - 11:57 | 3140700 tradingdaze
tradingdaze's picture

Apparently it's just a bunch of stuff.


Thu, 01/10/2013 - 11:59 | 3140714 Mrmojorisin515
Mrmojorisin515's picture

has anyone else noticed the wild swings in the dollar index lately?  Today its getting crushed, but the past few weeks it move +or- .20 points everyday

Thu, 01/10/2013 - 12:04 | 3140717 Dr. Engali
Dr. Engali's picture

I feel like I'm freaking Truman Burbank...nothing is real in this economy.

Thu, 01/10/2013 - 12:06 | 3140746 ekm
ekm's picture

It's going to pop pretty bad.

Thu, 01/10/2013 - 12:30 | 3140831 Mrmojorisin515
Mrmojorisin515's picture

i know that you drungus, but at some point something is going to break and i've been waiting for so long

Thu, 01/10/2013 - 12:05 | 3140742 Bullwinkle Moose
Bullwinkle Moose's picture

I can think of nothing that I trust from our government.

Thu, 01/10/2013 - 14:10 | 3141245 therearetoomany...
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